I focus on the strategic, economic and business implications of defense spending as the Chief Operating Officer of the non-profit Lexington Institute and Chief Executive Officer of Source Associates. Prior to holding my present positions, I was Deputy Director of the Security Studies Program at Georgetown University and taught graduate-level courses in strategy, technology and media affairs at Georgetown. I have also taught at Harvard University's Kennedy School of Government. I hold doctoral and masters degrees in government from Georgetown University and a bachelor of science degree in political science from Northeastern University. Disclosure: The Lexington Institute receives funding from many of the nation’s leading defense contractors, including Boeing, Lockheed Martin, Raytheon and United Technologies.

Pentagon's Best-Kept Secret: F-35 Fighter Is Progressing Nicely

If you pay any attention to media coverage of the F-35 fighter program, then you know the Pentagon’s biggest weapons program is “troubled” (to use the favored adjective of reporters). Flight tests are lagging, costs are skyrocketing, and overseas partners are beginning to get cold feet. So the Joint Strike Fighter, as it used to be called, is looking like another black eye for the Pentagon’s fouled up acquisition system, right?

Wrong. The reality is that for the third straight year flight tests are ahead of schedule, the cost to build each plane is falling fast, and international partners are so enthused that new customers are getting in line for the F-35 on a regular basis (South Korea will be next). So how come you don’t know any of this? The reason you don’t know it is that political appointees have decided they can score points with Congress by attacking their own program, and national media always lead with the most sensational information.

For instance, Pentagon officials recently disclosed that the cost of building and operating the F-35 had risen to $1.5 trillion — without mentioning that a third of that total is unprovable estimates of future inflation and two-thirds of supposed increases from the program baseline reflect changes in how costs are calculated rather than real increases. Officials also didn’t mention it would cost two or three times more to stick with the current fleet of fighters, given the cost of maintaining aging aircraft. Most news accounts just cited the trillion-dollar price-tag, preferring to stick with the “troubled program” theme. Easy to write, no thinking required.

There’s another side to this story, and it’s mostly positive. It helps explain why none of the three services receiving the plane is going to cancel its version and why none of the allies who signed on to the program when economies were stronger is now going to back out. F-35 is well on its way to being the most capable, cost-effective tactical aircraft in the history of warfare, and you can see that fact clearly reflected in how the flight-test program is progressing, the production cost is falling, and other countries are jockeying to get the plane.

Flight tests. Let’s start with the flight tests that are steadily verifying all the performance features of the aircraft. The program has surpassed its goals for flight testing in each of the last three years, doing 15 percent better than planned in 2011 and 20 percent better than planned so far in 2012. Collectively, the three versions of the F-35 have now flown well over 2,000 times, accomplishing more than a quarter of the planned tasks in a comprehensive testing regime. By the end of this year, the most common version of the plane — the one that will be used by the Air Force and exported to most foreign customers — will be 45 percent of the way through all its flight tests.

There has been a lot of talk lately about the dangers of producing F-35s before testing is completed, because if problems are found then planes already built will supposedly require costly fixes. So far, though, the danger seems to be mainly theoretical: Wikipedia says the price-tag for correcting problems uncovered in testing is $1.3 billion, which is less than one-half of one-percent of the production cost for 3,000 domestic and foreign fighters. Another concern has been delays in software; however, as of today 95 percent of the plane’s airborne software is either being used in flight tests or being tested in labs. No show-stoppers in sight, either in the hardware or in the software.

Few outsiders realize how smoothly the F-35 flight-test schedule is unfolding, so here are a few milestones of progress thus far this year. On January 18 the Air Force version performed its first night flight. On March 22 it conducted its first night-time refueling mission. On April 21 it completed its first aerial-refueling mission while carrying weapons. The Marine version accomplished the same refueling with weapons on board two week earlier; designed to land on a dime almost anywhere, the Marine variant has performed over 500 short takeoffs and over 300 vertical landings. The flights generally go well, which is why the testing schedule is so far ahead of plan.

Production Costs. The factor that usually trips up new weapons programs is cost, because while nobody in Congress understands how to measure the stealthiness of an F-35, everybody thinks they understand a price-tag. Pentagon leaders have thoroughly confused this issue by making it sound like the cost of F-35 is going up while actually taking huge amounts of money out of the program each year. In 2011 they cut 122 planes and $10 billion from near-term spending plans for the program; in 2012 they cut another 124 planes and $9 billion; and now in 2013 they have proposed cutting 179 planes and $15 billion. Cutting the rate at which F-35s are produced definitely increases the cost of each plane, but during the Obama years the program has become more of a piggy bank than a money pit for Pentagon planners.

Obviously, any money that already has been spent can’t be recovered. However, when you look at the cost going forward to build each new plane, that’s coming down — and fast. The “unit recurring flyaway” cost for the most common variant of F-35 fell below $150 million each in the third low-rate production lot and will fall below $100 million in the fifth lot currently being negotiated. By the time its gets to the tenth production lot, the recurring flyaway cost of the most common variant will be approaching what legacy F-16 and F/A-18 fighters sell for today. Granted, that’s just what it costs to “drive it off the lot,” and doesn’t include items like training and spare parts. On the other hand, the price-tag on legacy fighters doesn’t include all the equipment they will need in combat (the F-35 price-tag does), and older fighters don’t have the F-35′s stealth.

Foreign Partners. The F-35 effort was conceived in the Clinton years as a program that would provide next-generation fighters not only for the United States, but for eight other countries. The United Kingdom contributed $2.5 billion to its development, while Italy and the Netherlands each contributed $1 billion. Australia, Canada, Denmark, Norway and Turkey each contributed over $100 million. Thus, any sign that these overseas partners are wavering in their commitment is taken as evidence that trouble may lie ahead for the program.

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I don’t know where you get the idea that the F-35 is all fine and well. The F-35 is headed for a defeat in the Korean contest, where the head of acquisition admitted that the F-35 was only in the contest to put pressure on the viable bidders to extract a better term, and that they could drop the F-35 but doing so would lessen the competition and harm the national interests. The year end presidential election also puts a pressure against the F-35 win, as the F-35 is being associated with political corruption and backroom dealings in Korea, and its win would greatly harm the conservative’s chances of winning the presidential election. Some observers suspect that’s what the current president may wants, as he would be better off with a opposition rule than the rule by his biggest political rival from the ruling party.

Anyhow, the F-35 is headed for a defeat in the Korea FX contest, and this may shake the JSF partner’s confidence in the F-35 and may start looking an alternative in return.

you should know that s.korea have no better option than f35. f15se is now just paperplan and eurofighter”s cost of maintenance cost too much for mycountry.and china and japan will have stealth fighters soon and we should retire old fighter like f5,f4. i just hope f35 goes well and cost would down.or delay fx contest 2or3years….ㅜㅜ

i’m southkorean student in seoul you should know that s.korea have no better option than f35. f15se is now just paperplan and eurofighter’s cost of maintenance cost too much and they are not stealth.and china and japan will have stealth fighters soon and we should retire old fighter like f4,f5.i just hope f35 goes well and cost would down.

I understand your logic, but perhaps there is so much risk in ‘hoping’ for eventual F-35 development and maturity at affordable cost, starting in 2017?

What if something goes wrong and the maturity is not so successful and the systems or aircraft structure are flawed and need more extensive work? What if the purchase cost is %50 more than currently expected and operational costs are 100% more than currently expected?

That is a huge gamble for SK, yes? In order to replace F-4 and F-5??

Remember, Korea has big time goals and plans to develop a future 5th gen fighter. That deserves respect and support. If anyone can do it solo and cheaply, it can be Korea. Be patient.

In the near-term, it would seem to be most rational and realistic to acquire upgraded next-gen F-15K+ variants with latest avionics, radar, cockpit and self-protection/EW systems. These can be more cost-effectively sustained under the existing logistics and training budgets. Acquire next-gen heavy-ECM jamming pods and other next-gen systems for additional capabilities and flexibility.

Besides, the more reliable F-15′s next-gen APG-82 and an all-in-one heavy-ECM pod, combined with next-gen Sniper pod and IRST system will provide superior endurance and Long-range surveillance/situational awareness to commanders, compared to any block III F-35!

That is my opinion. And by the way, I was in Seoul 2 months ago, for a brief time. A truly impressive and wonderful city.

I have dreams too,but,the F-35 A, B and C is a dream not reality. the $cost keeps going up, the problems of all sorts never end. I suggest Wikipedia and about 30 hours of reading, to conclude your opinions. Closer to 1 billion $ than 100 million$ is reality. Cost and service for 42 years. Ask any country involved with the International Participation.

Given the grossly bloated defense budgets, many taxpayers no longer have ears for the Pentagon’s big d-ck projects. Enough. The Security Military Industrial Complex is sinking this country – not securing it. Its agencies can spend any amount of money claiming “covert activities,” and have zero accountability to taxpayers. They’re all playing very expensive games with our money. Wise up. http://online.wsj.com/article/SB10001424052702303610504577420232465796466.html

The F-35 program is in for a world of HURT later this year and the rest of this decade and beyond. Why?

1) The U.S. govt. is technically bankrupt and cannot afford a single Joint Strike Fighter (JSF), let alone 2,443 of them (the largest – by far – planned buy among the JSF partner nations).

2) Fed. debt ceiling crises (by early Nov. 2012 & beyond).

3) “Sequestration”: $500B of U.S. Dept. of Defense spending cuts over 10 years that comes into effect on Jan. 2/13. That’s on top of the $487B in cuts over a decade currently underway.

In May 2011, Sen. Carl Levin, chairman of the powerful U.S. Senate Armed Services Committee (SASC) said: “We cannot sacrifice other important acquisitions in the Department of Defense investment portfolio to pay for this [F-35] capability.”

At the same hearing, the Pentagon’s chief of major weapons systems procurement, Dr. Ashton Carter, said that the JSF had become “unaffordable.” No kidding!

Ranking SASC member Sen. John McCain stated: “The facts regarding this [F-35] program are truly troubling. No program should expect to be continued with that kind of track record, especially in our current fiscal climate. It seems to me we have to start at least considering alternatives.” (The Pentagon has quietly been doing so.)

McCain & his allies are trying to roll back “sequestration”, but it’s very doubtful they’ll be wholly successful, and even a partial roll-back (<$500B) may not happen. Why? Because of the tax-hating Tea Partiers & far-right-wingers (FRWs) in the GOP. They will re-use the same 'weapon' – the threat of debt default – that they employed last year during the debt ceiling crisis to get what they want: fed. spending reduced more. The Dept. of Defense was not spared last year & won't be this year & beyond.

Specifically, in 2011, for the first time in U.S. history, non-moderate right-wing politicians (Tea Partiers & FRWs) were willing to allow the govt. to default on its multi-trillion-dollar debt. They forced Pres. Obama & Speaker of the House Boehner & moderates in Congress in both parties to surrender to their demands. And the result for the military? An additional $37B in spending axed on top of the $487B mentioned.

Then what happened? The Pentagon announced that F-35 production would be slowed FURTHER & the price per warplane would RISE. On Feb. 14/12, Pentagon & Lockheed Martin officials said the aircraft's price was going UP.

After the political dramas associated with the debt ceiling & "sequestration" crises are played out later this year, we're going to see more cuts to the F-35 program, which is already $200B over its original budget of $197B.

In late 2011, Defense Secretary Leon Panetta said: “The end result of these cuts after ten years would be the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest Air Force in its history."

McCain added: "The United States would face the substantial risk of not being able to meet our defense needs. The consequence of a sequester on the Defense Department would set off a swift decline of the United States as the world’s leading military power.”

In addition to debt ceiling crises (this decade & beyond) & looming "sequestration", there are mega-issues that WILL negatively impact the F-35 program & other military fleet procurement projects. In June 2011, USA Today reported:

"The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.

In Dec./09, Forbes published a report (it's online), "Trillions Of Troubles Ahead", that every teenage & adult American should read. The sub-headline was "A crushing burden of debt threatens to sap America's growth for years to come."

The writing is on the wall, folks – for the F-35 program, and the nation.

I agree, it’s time for USAF to break loose from DoD dictates and immediately request modification to FY 13 appropriations for advanced procurement of new F-16 and F-15 as interim recapitalization stopgap!

Strategy is the key now, going forward. Past procurement acquisition processes are hereby retired! Finally! (After being talked about being reformed for what, the last 10 years now?)